By Jeff Hardy, LEAD for Policy, Regulatory and Market Enablers for Local Energy Systems, The Grantham Institute, Imperial College, London
Originally published in LinkedIn
I’m just emerging, blinking, from a week of intense communication about local and global decarbonisation. Whilst I have been projecting across a range of media, the most rewarding and useful has been the feedback. Contradicting myself, I’m straight back into projecting mode here, so please balance that with some feedback. What follows is my reflections.
A quick re-cap on the week.
My Energy Revolution Research Consortium colleague Dr Madeleine Morris and I did our first podcast as part of the Planetpod / Grantham Institute series. We focused on smart local energy systems. Hosted by the magnificent Amanda Carpenter and featuring a debut from Hector the dog we had a terrific time. Have a listen and let us know if something strikes a chord or discord.
On Wednesday evening I had the honour and pleasure of presenting to the Board of the New Zealand Electricity Authority via video conference, some 11863 miles away. I was talking about user-centric future energy systems. See the presentation here.
Back on a video conference on Thursday to talk about creating a pro-renewables environment in different places together with my colleague Dr Rob Gross and Xavier Casals from IRENA. This was discussed with an interested audience our Clean Power Programme, a series of online courses on the opportunities and advantages of clean power.
Finally, to Brussels on Friday via le tunnel to the FSR-BNetzA-CEER Forum on the Legal Issues of Energy Regulation. This might not sound like everyone’s cup of tea, but for an energy geek like me, it’s like a tech show where everyone is showing off the latest gadget (e.g. innovative regulatory instruments). Here (and with New Zealand) I was talking (amongst other research) Redesigning regulation, the report I co-authored with the wonderful Laura Sandys and my colleagues Professor Richard Green and Dr Aidan Rhodes.
Now that I’ve recovered, with some thanks to Belgian beer, I’ve been trying to pull some threads together which have been flapping in the wind. Bear with my ramblings…
The pace of change and thank you, Twitter
One of the reasons I love Twitter, particularly the community I’m in, is that you do get instant feedback (and occasionally necessary schooling). I was pulling together some figures on the pace of energy system transformation over the next thirty years based on National Grid’s Future Energy Scenarios. It manifested in the slide below:
I shared with Twitter the figure in brackets in black thinking “wow, that’s a lot of things per hour!”, but no! Not only are we already deploying enough renewable power per year to meet (and exceed!) scenarios, but our supply chains for vehicle and heating system replacement already turnover assets per year (see figures in green). The issue is these are mostly like-for-like fossil fuel replacements. Thus, the challenge is one of policy and regulation, supply chain development and business model innovation to turn these replacements into the green alternative.
Citizens and energy transitions
This previous point led to another discussion across various forums over the week. The scale and pace of zero-carbon transformation will both affect and be affected by citizens. Affect in terms of requiring citizens to accommodate new technologies and relationships with businesses like new means of mobility (including modal shift), heating (for example replacing millions of gas boilers with zero-carbon alternatives) and wider behavioural change, such as diet.
I’ve personally been very influenced by UKERC’s excellent work on “Transforming the UK Energy System: Public Values, Attitudes and Acceptability”. This report concludes that public acceptability (for low-carbon transitions) may only be achieved if it is rooted, in a significant way, in the described value system. The report elucidates several publics values, which include environmental protection, autonomy and power, social justice and fairness and improvement and quality (the latter I crudely interpret as ‘better’).
I take from this that citizens are prepared to ‘pay’ (or perhaps bear the costs of) their fair share for the net-zero transformation, but their values must be enshrined in social contracts with the state and businesses. These values will mean different things to different citizens across socio-economic and geographical circumstances. Thus, both policy and business models need to employ user-centred (or even user-led) design principles. In an increasingly data-rich world with all of the technology and tools available, this is eminently doable. However, it likely entails a myriad of approaches to meet the values and preferences of differentiated citizens. One size does not fit all.
There is also an incredibly tricky issue of ensuring that the system is fair to all consumers/citizens in an increasingly segmented world.
After my presentation in Brussels, I was accused (very politely) of being rather academic in that the recommendations in Redesigning Regulation are too far into the future: “…how do we get from here to there Jeff?”
There is significant inertia in the current system because of investments (not to mentioned vested interests) in business models and kit (like expensive and rather inflexible IT systems) that could be written off if we remove regulatory prescription and allow user-centric energy business model innovation. Thus, there will be an opposition that will slow (or halt entirely) change. It also boils down to a question of what you change first when there are so many decisions to make.
Together with colleagues in Imperial College London, the Universities of Leeds and Newcastle and the Energy Systems Catapult, we’ve done some work looking at this. You can read our paper here, on the subject for the detail, but in summary (and paraphrasing several studies I’ve been involved in), what it boils down to a series of near-term actions and decisions on the following:
- Introduce greater cost-reflectivity of energy (including environmental externalities) to drive the whole system optimisation in line with net-zero targets and desired energy system outcomes. (And whilst we are at it, decide what outcomes are desired).
- Take decisions soon on the strategy for low-carbon heat and transport (particularly the former) to provide imperative and long-term certainty to consumers and industry. (Fingers crossed we will see something on this in the forthcoming Energy White Paper).
- Enable energy business model innovation through open data, (potentially industry-led), interoperability and (potentially government-led) cyber-security and data protection. (See Energy Data Taskforce for more).
- Consider now how consumer protection regulation may need to change (and indeed merge across sectors) to regulate more bundled and innovative user-centric business models, including those where consumers cede responsibilities to businesses/third parties to act on their behalf.
- Consider the roles and responsibilities of different actors within the energy (and potentially wider) sectors - including local and national system operation, local authorities, digital energy platforms, energy suppliers – in the context of desired energy system outcomes.
Yes, these are still a little vague, but that’s because the nature of the decision depends on the outcomes sought and the subsequent pathway taken. Key for me is being clear on the overarching outcomes that the energy system must deliver, as these will drive the philosophy of all subsequent decisions. If we can be clear on outcomes, then we can be sure we are heading roughly in the right direction with any decisions taken (and adjust course accordingly if not!).
Anyway, enough projecting. I'd love to hear your thoughts.